UNIT-IWHAT IS ORGANIZATIONAL BEHAVIOUR1. Importance of
Developing Managers Interpersonal Skills
Companies with reputations as a good place to worksuch as
Hewlett-Packard, Lincoln Electric, Southwest Airlines, and
Starbuckshave a big advantage when attracting high performing
employees.
More important to workers is the job quality and the
supportiveness of the work environments.
Managers good interpersonal skills are likely to make the
workplace more pleasant, which in turn makes it easier to hire and
retain high performing employees.
2. What Managers Do
Definitions:
Manager:Someone who gets things done through other people. They
make decisions, allocate resources, and direct the activities of
others to attain goals.
Organization:A consciously coordinated social unit composed of
two or more people, that functions on a relatively continuous basis
to achieve a common goal or set of goals.
Management Functions
French industrialist Henri Fayol wrote that all managers perform
five management functions: plan, organize, command, coordinate, and
control. Modern management scholars have condensed to four:
planning, organizing, leading, and controlling.
Planning Define goals (organizational, departmental, worker
levels)
Establish an overall strategy for achieving those goals
Develop a comprehensive hierarchy of plans to integrate and
coordinate activities.
Organizing Determine what tasks are to be done
Who is to be assigned the tasks
How the tasks are to be grouped
Who reports to whom
Where decisions are to be made (centralized/decentralized)
Leading Motivate employees
Direct the activities of others
Select the most effective communication channels
Resolve conflicts among members
Controlling Monitor the organizations performance
Compare actual performance with the previously set goals
Correct significant deviations.
Management Roles
In the late 1960s, Henry Mintzberg studied five executives to
determine what managers did on their jobs. He concluded that
managers perform ten different, highly interrelated roles or sets
of behaviours attributable to their jobs.
The ten roles can be grouped as being primarily concerned with
interpersonal relationships, the transfer of information, and
decision making. Interpersonal roles
All managers are required to perform duties that are ceremonial
and symbolic in nature. Figureheadduties that are ceremonial and
symbolic in nature
Leadershiphire, train, motivate, and discipline employees
Liaisoncontact outsiders who provide the manager with
information. These may be individuals or groups inside or outside
the organization.
Informational roles
All managers, to some degree, collect information from outside
organizations and institutions. Monitorcollect information from
organizations and institutions outside their own
Disseminatora conduit to transmit information to organizational
members
Spokespersonrepresent the organization to outsiders
Decisional roles
Mintzberg identified four roles that revolve around making
choices. Entrepreneurmanagers initiate and oversee new projects
that will improve their organizations performance
Disturbance handlerstake corrective action in response to
unforeseen problems
Resource allocatorsresponsible for allocating human, physical,
and monetary resources
Negotiator rolediscuss issues and bargain with other units to
gain advantages for their own unit
Management Skills
Robert Katz has identified three essential management skills:
technical, human, and conceptual.
Technical skills
The ability to apply specialized knowledge or expertise. All
jobs require some specialized expertise, and many people develop
their technical skills on the job.
Human skills
The ability to work with, understand, and motivate other people,
both individually and in groups, describes human skills.
Many people are technically proficient but interpersonally
incompetent.
Conceptual skills
The managers must have the mental ability to analyze and
diagnose complex situations
Decision making, for example, requires managers to spot
problems, identify alternatives that can correct them, evaluate
those alternatives, and select the best one.
Effective vs. Successful Managerial Activities
Luthans and his associates studied more than 450 managers. They
found that all managers engage in four managerial activities.
Traditional managementDecision making, planning, and
controlling. The average manager spent 32 percent of his or her
time performing this activity.
Communication Exchanging routine information and processing
paperwork. The average manager spent 29 percent of his or her time
performing this activity.
Human resource managementMotivating, disciplining, managing
conflict, staffing, and training. The average manager spent 20
percent of his or her time performing this activity.
NetworkingSocializing, politicking, and interacting with
outsiders. The average manager spent 19 percent of his or her time
performing this activity.
Successful managersdefined as those who were promoted the
fastest
Networking made the largest relative contribution to
success.
Human resource management activities made the least relative
contribution.
Effective managersdefined as quality and quantity of
performance, as well as, commitment to employees:
Communication made the largest relative contribution.
Networking made the least relative contribution.
Successful managers do not give the same emphasis to each of
those activities as do effective managersit almost the opposite of
effective managers.
This finding challenges the historical assumption that
promotions are based on performance. A Review of the Managers
Job
One common thread runs through the functions, roles, skills, and
activities approaches to management: managers need to develop their
people skills if they are going to be effective and successful.
3. Definition of OB Organizational Behaviour is a field of study
that investigates the impact that individuals, groups, and
structure have on behaviour within organizations for the purpose of
applying such knowledge toward improving an organizations
effectiveness.
OB studies three determinants of behaviour in organizations:
individuals, groups, and structure.
OB applies the knowledge gained about individuals, groups, and
the effect of structure on behaviour in order to make organizations
work more effectively.
OB is concerned with the study of what people do in an
organization and how that behaviour affects the performance of the
organization.
4. Complementing Intuition with Systematic Study
You can improve your predictive ability by replacing your
intuitive opinions with a more systematic approach.
The systematic approach used will uncover important facts and
relationships and will provide a base from which more accurate
predictions of behaviour can be made.
Behaviour generally is predictable if we know how the person
perceived the situation and what is important to him or her. An
approach that complements systematic study is evidence-based
management. Evidence-based management (EBM) involves basing
managerial decisions on the best available scientific evidence.
Systematic study replaces intuition, or those gut feelings about
why I do what I do and what makes others tick. We want to move away
from intuition to analysis when predicting behaviour.
5. Disciplines that Contribute to the OB Field
Organizational behaviour is an applied behavioural science that
is built upon contributions from a number of behavioural
disciplines.
The predominant areas are psychology, sociology, social
psychology, anthropology, and political science.
Psychology
Psychology is the science that seeks to measure, explain, and
sometimes change the behaviour of humans and other animals.
More recently, their contributions have been expanded to include
learning, perception, personality, emotions, training, leadership
effectiveness, needs and motivational forces, job satisfaction,
decision making processes, performance appraisals, attitude
measurement, employee selection techniques, work design, and job
stress.
Sociology
Sociologists study the social system in which individuals fill
their roles; that is, sociology studies people in relation to their
fellow human beings.
Their greatest contribution to OB is through their study of
group behaviour in organizations, particularly formal and complex
organizations.
Social Psychology
Social psychology blends the concepts of psychology and
sociology.
It focuses on the influence of people on one another.
Anthropology
Anthropology is the study of societies to learn about human
beings and their activities.
Anthropologists work on cultures and environments, they have
helped us understand differences in fundamental values, attitudes,
and behaviour among people in different countries and within
different organizations.
6. There Are Few Absolutes in OB
There are few, if any, simple and universal principles that
explain OB. Human beings are complex. Because they are not alike,
our ability to make simple, accurate, and sweeping generalizations
is limited.
OB concepts must reflect situational, or contingency,
conditions.
Contingency variablessituational factors are variables that
moderate the relationship between the independent and dependent
variables.
7. Challenges and Opportunities for OB
There are many challenges and opportunities today for managers
to use OB concepts.
7.1 Responding to Globalization
Organizations are no longer constrained by national borders.In
the process, the managers job is changing. Increased Foreign
Assignments If youre a manager, you are increasingly likely to find
yourself in a foreign assignmenttransferred to your employers
operating division or subsidiary in another country. Working with
People from Different Cultures Even in your own country, youll find
yourself working with bosses, peers, and other employees born and
raised in different cultures. What motivates you may not motivate
them. Or your communication style may be straight forward and open,
which others may find uncomfortable and threatening. To work
effectively with people from different cultures, you need to
understand how their culture, geography, and religion have shaped
them and how to adapt your management style to their differences.
Overseeing Movement of Jobs to Countries with Low-Cost Labor In a
global economy, jobs tend to flow where lower costs give businesses
a comparative advantage, though labor groups, politicians, and
local community leaders see the exporting of jobs as undermining
the job market at home.
Managers face the difficult task of balancing the interests of
their organization with their responsibilities to the communities
in which they operate.
7.2 Managing Workforce Diversity
Workforce diversity is one of the most important and broad-based
challenges currently facing organizations. Workforce diversity
-means that organizations are becoming more heterogeneous in terms
of gender, race, and ethnicity. It is an issue in Canada,
Australia, South Africa, Japan, and Europe as well as the United
States. Embracing Diversity-A melting-pot approach assumed people
who were different would automatically assimilate. Employees do not
set aside their cultural values and lifestyle preferences when they
come to work.
The melting pot assumption is replaced by one that recognizes
and values differences.
Members of diverse groups were a small percentage of the
workforce and were, for the most part, ignored by large
organizations (pe-1980s); now:
i. 47 percent of the U.S. labour force are women
ii. Minorities and immigrants make up 23 percent
iii. More workers than ever are unmarried with no children.
Implication-Workforce diversity has important implications for
management practice.
i. Shift to recognizing differences and responding to those
differencesii.Providing diversity training and revamping benefit
programs to accommodate the different needs of employees
7.3 Improving Quality and Productivity
Every process is evaluated in terms of contribution to goals
Rather than make incremental changes, often old systems are
eliminated entirely and replaced with new systems
To improve productivity and quality, managers must include
employees.
7.4 Improving Customer Service and People Skills
The majority of employees in developed countries work in service
jobsjobs that require substantive interaction with the firms
customers. For example, 80 percent of U.S. workers are employed in
service industries.
Employee attitudes and behaviour are directly related to
customer satisfaction requiring management to create a customer
responsive culture.
People skills are essential to managerial effectiveness.
OB provides the concepts and theories that allow managers to
predict employee behaviour in given situations.
7.5 Empowering People
Today managers are being called coaches, advisers, sponsors, or
facilitators, and in many organizations, employees are now called
associates.
There is a blurring between the roles of managers and workers;
decision making is being pushed down to the operating level, where
workers are being given the freedom to make choices about schedules
and procedures and to solve work-related problems.
Managers are empowering employees.
They are putting employees in charge of what they do.
Managers have to learn how to give up control.
Employees have to learn how to take responsibility for their
work and make appropriate decisions.
7.6 Coping with Temporariness
Managers have always been concerned with change:
Change is an ongoing activity for most managers. The concept of
continuous improvement, for instance, implies constant change
In the past, managing could be characterized by long periods of
stability, interrupted occasionally by short periods of change.
Today, long periods of ongoing change are interrupted
occasionally by short periods of stability!
Permanent temporariness:
Both managers and employees must learn to live with flexibility,
spontaneity, and unpredictability
The jobs that workers perform are in a permanent state of flux,
so workers need to continually update their knowledge and skills to
perform new job requirements.
Work groups are also increasingly in a state of flux.
Predictability has been replaced by temporary work groups, teams
that include members from different departments and whose members
change all the time, and the increased use of employee rotation to
fill constantly changing work assignments.
Organizations themselves are in a state of flux.
They reorganize their various divisions, sell off
poor-performing businesses, downsize operations, subcontract
non-critical services and operations to other organizations, and
replace permanent employees with temporaries.
7.7 Stimulating Innovation and Change
Successful organizations must foster innovation and the art of
change.
Companies that maintain flexibility, continually improve
quality, and beat their competition to the marketplace with
innovative products and services will be tomorrows winners.
Employees are critical to an organizations ability to change and
innovate.
7.8 Helping Employees Balance Work-Life Conflicts
The creation of the global workforce means work no longer
sleeps. Workers are on-call 24-hours a day or working
non-traditional shifts.
Communication technology has provided a vehicle for working at
any time or any place.
Employees are working longer hours per weekfrom 43 to 47 hours
per week since 1977.
The lifestyles of families have changes creating conflict: more
dual career couples and single parents find it hard to fulfill
commitments to home, children, spouse, parents, and friends.
Employees want jobs that allow flexibility and provide time for
a life.
7.9 Improving Ethical Behaviour
In an organizational world characterized by cutbacks,
expectations of increasing worker productivity, and tough
competition, many employees feel pressured to engage in
questionable practices.
Members of organizations are increasingly finding themselves
facing ethical dilemmas in which they are required to define right
and wrong conduct.
Examples of decisions employees might have to make are:
Blowing the whistle on illegal activities
Following orders with which they do not personally agree
Possibly giving inflated performance evaluations that could save
an employees job
Playing politics to help with career advancement, etc.
Organizations are responding to this issue by:
Writing and distributing codes of ethics
Providing in-house advisors
Creating protection mechanisms for employees who reveal internal
unethical practices
Managers need to create an ethically healthy environment for
employees where they confront a minimal degree of ambiguity
regarding right or wrong behaviours.
8.Coming Attractions: Developing an OB Model
An Overview A model is an abstraction of reality, a simplified
representation of some real-world phenomenon.
There are three levels of analysis in OB:
Individual
Group
Organizational Systems Level
Each level is constructed upon the previous level.
The Dependent Variables
Dependent variables are the key factors that you want to explain
or predict and that are affected by some other factor.
Dependent variables in OB:
Productivity
Absenteeism
Turnover
Job satisfaction
A fifth variableorganizational citizenshiphas been added to this
list.
Productivity
It is achieving goals by transferring inputs to outputs at the
lowest cost. This must be done both effectiveness and
efficiency.
An organization is effective when it successfully meets the
needs of its clientele or customers
Example: When sales or market share goals are met, productivity
also depends on achieving those goals efficiently
An organization is efficient when it can do so at a low
cost.
Popular measures of efficiency include: ROI, profit per dollar
of sales, and output per hour of labour.
Absenteeism
Absenteeism is the failure to report to work.
Estimated annual costover $40 billion for U.S. organizations;
$12 billion for Canadian firms; more than 60 billion Deutsch Marks
(U.S. $35.5 billion) each year in Germany
A one-day absence by a clerical worker can cost a U.S. employer
up to $100 in reduced efficiency and increased supervisory
workload.
The workflow is disrupted and often important decisions must be
delayed.
All absences are not bad. For instance, illness, fatigue, or
excess stress can decrease an employees productivityit may well be
better to not report to work rather than perform poorly.
Turnover
Turnover is the voluntary and involuntary permanent withdrawal
from an organization.
A high turnover rate results in increased recruiting, selection,
and training costs; costs estimated at about $15,000 per
employee.
All organizations have some turnover and the right people
leavingunder-performing employeesthereby creating opportunity for
promotions, and adding new/fresh ideas, and replacing marginal
employees with higher skilled workers.
Turnover often involves the loss of people the organization does
not want to lose. Deviant Workplace Behavior Also called antisocial
behaviour or workplace incivility Voluntary behaviour that violates
significant organizational norms and, in so doing, threatens the
well-being of the organization or its members.
Organizational citizenship Behavior (OCB) Organizational
citizenship is discretionary behaviour that is not part of an
employees formal job requirements, but that nevertheless promotes
the effective functioning of the organization.
Desired citizenship behaviours include:
Constructive statements about work group and organization
Helping others on their team
Volunteering for extra job activities
Avoiding unnecessary conflicts
Showing care for organizational property
Respecting rules and regulations
Tolerating occasional work-related impositions.
Job satisfaction
Job satisfaction is the difference between the amount of rewards
workers receive and the amount they believe they should
receive.
Job satisfaction represents an attitude rather than a
behavior.
It became a primary dependent variable for two reasons:
Demonstrated relationship to performance factors
The value preferences held by many OB researchers
Managers have believed for years that satisfied employees are
more productive, however:
Much evidence questions that assumed causal relationship
It can be argued that advanced societies should be concerned not
just with the quantity of life, but also with the quality of
life
Ethically, organizations have a responsibility to provide
employees with jobs that are challenging and intrinsically
rewarding.
The Independent VariablesAn independent variable is the presumed
cause of some change in a dependent variable. Individual-level
variables:
People enter organizations with certain characteristics that
will influence their behaviour at work.
The more obvious of these are personal or biographical
characteristics such as age, gender, and marital status;
personality characteristics; an inherent emotional framework;
values and attitudes; and basic ability levels.
There is little management can do to alter them, yet they have a
very real impact on employee behaviour.
There are four other individual-level variables that have been
shown to affect employee behaviour:
Perception
Individual decision making
Learning
Motivation
Group-level variables:
The behaviour of people in groups is more than the sum total of
all the individuals acting in their own way.
People behave differently in groups than they do when alone.
People in groups are influenced by:
Acceptable standards of behaviour by the group
Degree of attractiveness to each other
Communication patterns
Leadership and power
Levels of conflict
Organization System-Level Variables:
Organizational behaviour reaches its highest level of
sophistication when we add formal structure.
The design of the formal organization, work processes, and jobs;
the organizations human resource policies and practices, and the
internal culture, all have an impact.
Toward a Contingency OB Model
The model does not explicitly identify the vast number of
contingency variables because of the tremendous complexity. We will
introduce important contingency variables that will improve the
explanatory linkage between the independent and dependent variables
in our OB model.
Acknowledging the dynamics of behaviour and the fact that work
stress is an individual, group, and organizational issues.
FOUNDATIONS OF INDIVIDUAL BEHAVIOUR1. Ability
Ability refers to an individuals capacity to perform the various
tasks in a job. It is a current assessment of what one can do.
Individual overall abilities are made up of two sets of factors:
intellectual and physical.
2.Intellectual Abilities
Intellectual abilities are those needed to perform mental
activities.
IQ tests are designed to ascertain ones general intellectual
abilities. Examples of such tests are popular college admission
tests such as the SAT, GMAT, and LSAT.
The seven most frequently cited dimensions making up
intellectual abilities are: number aptitude, verbal comprehension,
perceptual speed, inductive reasoning, deductive reasoning, spatial
visualization, and memory.
Jobs differ in the demands they place on incumbents to use their
intellectual abilities. A careful review of the evidence
demonstrates that tests that assess verbal, numerical, spatial, and
perceptual abilities are valid predictors of job proficiency at all
levels of jobs.
The major dilemma faced by employers who use mental ability
tests is that they may have a negative impact on racial and ethnic
groups.
New research in this area focuses on multiple intelligences,
which breaks down intelligence into its four sub-parts: cognitive,
social, emotional, and cultural.
3.Physical Abilities
Specific physical abilities gain importance in doing less
skilled and more standardized jobs.
Research has identified nine basic abilities involved in the
performance of physical tasks.
Individuals differ in the extent to which they have each of
these abilities.
High employee performance is likely to be achieved when
management matches the extent to which a job requires each of the
nine abilities and the employees abilities.
Finding and analyzing the variables that have an impact on
employee productivity, absence, turnover, and satisfaction is often
complicated.
Many of the conceptsmotivation, or power, politics or
organizational cultureare hard to assess. Biographical
Characteristics Other factors are more easily definable and readily
availabledata that can be obtained from an employees personnel file
and would include characteristics such as:
Age
Gender
Marital status
Length of service, etc.
Age
The relationship between age and job performance is increasing
in importance.
First, there is a widespread belief that job performance
declines with increasing age.
Second, the workforce is aging; workers over 55 are the fastest
growing sector of the workforce.
Third, U.S. legislation largely outlaws mandatory
retirement.
Employers perceptions are mixed.
They see a number of positive qualities that older workers bring
to their jobs, specifically experience, judgment, a strong work
ethic, and commitment to quality.
Older workers are also perceived as lacking flexibility and as
being resistant to new technology.
Some believe that the older you get, the less likely you are to
quit your job. That conclusion is based on studies of the
age-turnover relationship.
It is tempting to assume that age is also inversely related to
absenteeism.
Most studies do show an inverse relationship, but close
examination finds that the age-absence relationship is partially a
function of whether the absence is avoidable or unavoidable.
In general, older employees have lower rates of avoidable
absence. However, they have higher rates of unavoidable absence,
probably due to their poorer health associated with aging and
longer recovery periods when injured.
There is a widespread belief that productivity declines with age
and that individual skills decay over time.
Reviews of the research find that age and job performance are
unrelated.
This seems to be true for almost all types of jobs, professional
and nonprofessional.
The relationship between age and job satisfaction is mixed.
Most studies indicate a positive association between age and
satisfaction, at least up to age 60.
Other studies, however, have found a U-shaped relationship. When
professional and nonprofessional employees are separated,
satisfaction tends to continually increase among professionals as
they age, whereas it falls among non professionals during middle
age and then rises again in the later years.
Gender
There are few, if any, important differences between men and
women that will affect their job performance, including the areas
of:
Problem-solving
Analytical skills
Competitive drive
Motivation
Sociability
Learning ability
Women are more willing to conform to authority, and men are more
aggressive and more likely than women to have expectations of
success, but those differences are minor.
There is no evidence indicating that an employees gender affects
job satisfaction.
There is a difference between men and women in terms of
preference for work schedules.
Mothers of preschool children are more likely to prefer
part-time work, flexible work schedules, and telecommuting in order
to accommodate their family responsibilities.
Absence and turnover rates
Womens quit rates are similar to mens.
The research on absence consistently indicates that women have
higher rates of absenteeism.
The logical explanation: cultural expectation that has
historically placed home and family responsibilities on the
woman.
Marital Status There are not enough studies to draw any
conclusions about the effect of marital status on job
productivity.
Research consistently indicates that married employees have
fewer absences, undergo less turnover, and are more satisfied with
their jobs than are their unmarried coworkers More research needs
to be done on the other statuses besides single or married, such as
divorce, domestic partnering, etc.
Tenure
The issue of the impact of job seniority on job performance has
been subject to misconceptions and speculations.
Extensive reviews of the seniority-productivity relationship
have been conducted:
There is a positive relationship between tenure and job
productivity.
There is a negative relationship between tenure to absence.
Tenure is also a potent variable in explaining turnover.
Tenure has consistently been found to be negatively related to
turnover and has been suggested as one of the single best
predictors of turnover.
The evidence indicates that tenure and satisfaction are
positively related.
The Ability-Job Fit
Employee performance is enhanced when there is a high
ability-job fit.
The specific intellectual or physical abilities required depend
on the ability requirements of the job. For example, pilots need
strong spatial-visualization abilities.
4.Learning All complex behaviour is learned.
If we want to explain and predict behaviour, we need to
understand how people learn.
Definition of Learning
A generally accepted definition is any relatively permanent
change in behaviour that occurs as a result of experience.
The definition has several components that deserve
clarification:
First, learning involves change.
Second, the change must be relatively permanent.
Third, our definition is concerned with behaviour.
Finally, some form of experience is necessary for learning.
Theories of Learning
There are three theoriesclassical conditioning, operant
conditioning, and social learning.
Classical Conditioning Classical conditioning grew out of
experiments conducted at the turn of the century by a Russian
physiologist, Ivan Pavlov, to teach dogs to salivate in response to
the ringing of a bell.
Key concepts in classical conditioning [Pavlovs experiment]
The meat was an unconditioned stimulus; it invariably caused the
dog to react in a specific way.
The bell was an artificial stimulus, or what we call the
conditioned stimulus.
The conditioned response. This describes the behaviour of the
dog; it salivated in reaction to the bell alone.
Learning a conditioned response involves building up an
association between a conditioned stimulus and an unconditioned
stimulus.
When the stimuli, one compelling and the other one neutral, are
paired, the neutral one becomes a conditioned stimulus and, hence,
takes on the properties of the unconditioned stimulus.
Classical conditioning is passivesomething happens, and we react
in a specific way. It is elicited in response to a specific,
identifiable event.
Operant Conditioning Operant conditioning argues that behaviour
is a function of its consequences. People learn to behave to get
something they want or to avoid something they do not want.
The tendency to repeat such behaviour is influenced by
reinforcement or lack of reinforcement.
Harvard psychologist B.F. Skinners research on operant
conditioning expanded our knowledge.
Tenets of Operant Conditioning are:
Behaviour is learned.
People are likely to engage in desired behaviours if they are
positively reinforced for doing so.
Rewards are most effective if they immediately follow the
desired response.
Any situation in which it is either explicitly stated or
implicitly suggested that reinforcements are contingent on some
action on your part involves the use of operant learning.
Social Learning Individuals can also learn by observing what
happens to other people, by being told about something, as well as
by direct experiences.
Learning by observing is an extension of operant conditioning;
it also acknowledges the existence of observational learning and
the importance of perception in learning.
The influence of models is central to social learning.
Four processes determine the influence that a model will have on
an individual.
Attentional processes. People learn from a model only when they
recognize and pay attention to its critical features.
Retention processes. A models influence will depend on how well
the individual remembers the models action after the model is no
longer readily available.
Motor reproduction processes. After a person has seen a new
behaviour by observing the model, the watching must be converted to
doing.
Reinforcement processes. Individuals will be motivated to
exhibit the modeled behaviour if positive incentives or rewards are
provided.
5. Shaping: A Managerial Tool
When we attempt to mold individuals by guiding their learning in
graduated steps, we are shaping behaviour.
It is done by systematically reinforcing each successive step
that moves the individual closer to the desired response.
Methods of Shaping Behaviour.
Positive reinforcementfollowing a response with something
pleasant
Negative reinforcementfollowing a response by the termination or
withdrawal of something unpleasant
Punishment-is causing an unpleasant condition in an attempt to
eliminate an undesirable behaviour
Extinctioneliminating any reinforcement that is maintaining a
behavior. When the behaviour is not reinforced, it tends to
gradually be extinguished.
Both positive and negative reinforcement result in learning.
They strengthen a response and increase the probability of
repetition. Both punishment and extinction, however, weaken
behaviour and tend to decrease its subsequent frequency.
Reinforcement, whether it is positive or negative, has an
impressive record as a shaping tool.
Schedules of Reinforcement
The two major types of reinforcement schedules are: 1)
continuous and 2) intermittent.
A continuous reinforcement schedule reinforces the desired
behaviour each and every time it is demonstrated.
In an intermittent schedule, not every instance of the desirable
behaviour is reinforced, but reinforcement is given often enough to
make the behaviour worth repeating.
It can be compared to the workings of a slot machine.
The intermittent payoffs occur just often enough to reinforce
behaviour.
Evidence indicates that the intermittent, or varied, form of
reinforcement tends to promote more resistance to extinction than
does the continuous form.
An intermittent reinforcement can be of a ratio or interval
type.
Ratio schedules depend upon how many responses the subject
makes; the individual is reinforced after giving a certain number
of specific types of behaviour.
Interval schedules depend upon how much time has passed since
the last reinforcement; the individual is reinforced on the first
appropriate behaviour after a particular time has elapsed.
A reinforcement can also be classified as fixed or variable.
Intermittent techniques be placed into four categories.
Fixed-interval reinforcement schedulerewards are spaced at uniform
time intervals; the critical variable is time, and it is held
constant. Some examples:
This is the predominant schedule for most salaried workers in
North Americathe paycheck.
Variable-interval reinforcementsrewards are distributed in time
so that reinforcements are unpredictable.
Pop quizzes
A series of randomly timed unannounced visits to a company
office by the corporate audit staff
In a fixed-ratio schedule, after a fixed or constant number of
responses are given, a reward is initiated.
A piece-rate incentive plan is a fixed-ratio schedule.
When the reward varies relative to the behavior of the
individual, he or she is said to be reinforced on a variable-ratio
schedule.
Salespeople on commission
Reinforcement Schedules and Behaviour
Continuous reinforcement schedules can lead to early satiation.
Under this schedule, behaviour tends to weaken rapidly when
reinforcers are withheld.
Continuous reinforcers are appropriate for newly emitted,
unstable, or low-frequency responses.
Intermittent reinforcers preclude early satiation because they
do not follow every response.
They are appropriate for stable or high-frequency responses.
In general, variable schedules tend to lead to higher
performance than fixed schedules.
Variable-interval schedules generate high rates of response and
more stable and consistent behaviour because of a high correlation
between performance and reward. The employee tends to be more alert
since there is a surprise factor.
Behaviour Modification
A classic was study conducted at Emery Air Freight (now part of
Federal Express):
Emerys management wanted packers to use freight containers for
shipments whenever possible.
Packers intuitively felt that 90 percent of shipments were
containerized. An analysis showed that it was only 45 percent.
Management established a program of feedback and positive
reinforcements by asking each packer to keep a checklist of his or
her daily packings, both containerized and noncontainerized.
At the end of each day, the packer computed his or her container
utilization rate.
Container utilization jumped to more than 90 percent on the
first day of the program and held.
This simple program of feedback and positive reinforcements
saved the company $2 million over a three-year period.
The typical OB Mod program follows a five-step problem-solving
model:
Identifying critical behaviours
Developing baseline data
Identifying behaviour consequences
Developing and implementing an intervention strategy
Evaluating performance improvement
Critical behaviours make a significant impact on the employees
job performance; these are those 510 percent of behaviours that may
account for up to 70 or 80 percent of each employees
performance.
Developing baseline data determines the number of times the
identified behaviour is occurring under present conditions.
Identifying behavioural consequences tells the manager the
antecedent cues that emit the behaviour and the consequences that
are currently maintaining it.
Developing and implementing an intervention strategy will entail
changing some elements of the performance-reward linkage-structure,
processes, technology, groups, or the taskwith the goal of making
high-level performance more rewarding.
Evaluating performance improvement is important to demonstrate
that a change took place as a result of the intervention
strategy.
OB Mod has been used by a number of organizations to improve
employee productivity and to reduce errors, absenteeism, tardiness,
accident rates, and improve friendliness toward customers.
ATTITUDES AND JOB SATISFACTION
ATTITUDES
Attitudes are evaluative statements that are either favourable
or unfavourable concerning objects, people, or events.
Attitudes are not the same as values, but the two are
interrelated.
Three components of an attitude Cognition
Affect
Behaviour
The belief that discrimination is wrong is a value statement and
an example of the cognitive component of an attitude.
Value statements set the stage for the more critical part of an
attitudeits affective component. Affect is the emotional or feeling
segment of an attitude. Example: I dont like Jon because he
discriminates again minorities.
The behavioural component of an attitude refers to an intention
to behave in a certain way toward someone or something. Example: I
chose to avoid Jon because he discriminates.
Viewing attitudes as made up of three components helps with
understanding of the potential relationship between attitudes and
behaviour, however, when we refer to attitude essentially we mean
they affect part of the three components.
In contrast to values, your attitudes are less stable.
Advertisements are directed at changing your attitudes and are
often successful.
In organizations, attitudes are important because they affect
job behaviour.
Types of Attitudes
OB focuses our attention on a very limited number of job-related
attitudes. Most of the research in OB has been concerned with three
attitudes: job satisfaction, job involvement, and organizational
commitment.
Job satisfaction
It is an individuals general attitude toward his/her job.
A high level of job satisfaction equals positive attitudes
toward the job and vice versa.
Employee attitudes and job satisfaction are frequently used
interchangeably.
Often when people speak of employee attitudes they mean employee
job satisfaction.
Job involvement
A workable definition: the measure of the degree to which a
person identifies psychologically with his/her job and considers
his/her perceived performance level important to self-worth.
High levels of job involvement is thought to result in fewer
absences and lower resignation rates.
Job involvement more consistently predicts turnover than
absenteeism.
Organizational commitment
A state in which an employee identifies with a particular
organization and its goals, and wishes to maintain membership in
the organization.
Research evidence demonstrates negative relationships between
organizational commitment and both absenteeism and turnover.
An individuals level of organizational commitment is a better
indicator of turnover than the far more frequently used job
satisfaction predictor because it is a more global and enduring
response to the organization as a whole than is job
satisfaction.
This evidence, most of which is more than two decades old, needs
to be qualified to reflect the changing employee-employer
relationship.
Organizational commitment is probably less important as a
job-related attitude than it once was because the unwritten loyalty
contract in place when this research was conducted is no longer in
place.
Attitudes and Consistency
People sometimes change what they say so it does not contradict
what they do.
Research has generally concluded that people seek consistency
among their attitudes and between their attitudes and their
behaviour.
Individuals seek to reconcile divergent attitudes and align
their attitudes and behaviour so they appear rational and
consistent.
When there is an inconsistency, forces are initiated to return
the individual to an equilibrium state where attitudes and
behaviour are again consistent, by altering either the attitudes or
the behaviour, or by developing a rationalization for the
discrepancy.
Cognitive Dissonance Theory
Leon Festinger, in the late 1950s, proposed the theory of
cognitive dissonance, seeking to explain the linkage between
attitudes and behaviour. He argued that any form of inconsistency
is uncomfortable and that individuals will attempt to reduce the
dissonance.
Dissonance means an inconsistency.
Cognitive dissonance refers to any incompatibility that an
individual might perceive between two or more of his/her attitudes,
or between his/her behaviour and attitudes.
No individual can completely avoid dissonance.
The desire to reduce dissonance would be determined by:
The importance of the elements creating the dissonance.
The degree of influence the individual believes he/she has over
the elements.
The rewards that may be involved in dissonance.
Importance: If the elements creating the dissonance are
relatively unimportant, the pressure to correct this imbalance will
be low.
Influence: If the dissonance is perceived as an uncontrollable
result, they are less likely to be receptive to attitude change.
While dissonance exists, it can be rationalized and justified.
Rewards: The inherent tension in high dissonance tends to be
reduced with high rewards.
Moderating factors suggest that individuals will not necessarily
move to reduce dissonanceor consistency.
Organizational implications
Greater predictability of the propensity to engage in attitude
and behavioural change
The greater the dissonanceafter it has been moderated by
importance, choice, and rewards factorsthe greater the pressures to
reduce it.
Measuring the A-B Relationship
Early research on attitudes and common sense assumed a causal
relationship to behaviour. In the late 1960s, this assumed
relationship between attitudes and behaviour (A-B) was challenged.
Recent research has demonstrated that attitudes significantly
predict future behaviour.
The most powerful moderators:
Importance
Specificity
Accessibility
Social pressures
Direct experience
Importance: Reflects fundamental values, self-interest, or
identification with individuals or groups that a person values.
Specificity: The more specific the attitude and the more
specific the behaviour, the stronger the link between the two.
Accessibility: Attitudes that are easily remembered are more
likely to predict behaviour than attitudes that are not accessible
in memory.
Social pressures: Discrepancies between attitudes and behaviour
are more likely to occur where social pressures to behave in
certain ways hold exceptional power.
Direct experience: The attitude-behaviour relationship is likely
to be much stronger if an attitude refers to an individuals direct
personal experience.
Self-perception theory
Researchers have achieved still higher correlations by pursuing
whether or not behaviour influences attitudes.
Self-perception theory argues that attitudes are used to make
sense out of an action that has already occurred rather than
devices that precede and guide action. Example: Ive had this job
for 10 years, no one has forced me to stay, so I must like it!
Contrary to cognitive dissonance theory, attitudes are just
casual verbal statements; they tend to create plausible answers for
what has already occurred.
While the traditional attitude-behaviour relationship is
generally positive, the behaviour-attitude relationship is stronger
particularly when attitudes are vague and ambiguous or little
thought has been given to it previously.
An Application: Attitude Surveys
The most popular method for getting information about employee
attitudes is through attitude surveys.
Using attitude surveys on a regular basis provides managers with
valuable feedback on how employees perceive their working
conditions. Managers present the employee with set statements or
questions to obtain specific information.
Policies and practices that management views as objective and
fair may be seen as inequitable by employees in general or by
certain groups of employees and can lead to negative attitudes
about the job and the organization.
Employee behaviours are often based on perceptions, not reality.
Often employees do not have objective data from which to base their
perceptions.
The use of regular attitude surveys can alert management to
potential problems and employees intentions early so that action
can be taken to prevent repercussions.
Attitudes and Workforce Diversity
A survey of U.S. organizations with 100 or more employees found
that 47 percent or so of them sponsored some sort of diversity
training.
These diversity programs include a self-evaluation phase where
people are pressed to examine themselves and to confront ethnic and
cultural stereotypes they might hold. This is followed by
discussion with people from diverse groups.
Additional activities designed to change attitudes include
arranging for people to do volunteer work in community or social
service centers in order to meet face to face with individuals and
groups from diverse backgrounds, and using exercises that let
participants feel what it is like to be different.
JOB SATISFACTION
Measuring Job Satisfaction
Job satisfaction is an individuals general attitude toward
his/her job.
Jobs require interaction with co-workers and bosses, following
organizational rules and policies, meeting performance standards,
living with working conditions that are often less than ideal, and
the like. This means that an employees assessment of how satisfied
or dissatisfied he or she is with his/her job is a complex
summation of a number of discrete job elements.
The two most widely used approaches are a single global rating
and a summation score made up of a number of job facets.
The single global rating method is nothing more than asking
individuals to respond to one question, such as All things
considered, how satisfied are you with your job?
A summation of job facets is more sophisticated:
It identifies key elements in a job and asks for the employees
feelings about each one ranked on a standardized scale.
Typical factors that would be included are the nature of the
work, supervision, present pay, promotion opportunities, and
relations with co-workers.
Comparing these approaches, simplicity seems to work as well as
complexity. Comparisons of one-question global ratings with the
summation-of-job-factors method indicate both are valid.
How Satisfied Are People in Their Jobs?
Most people are satisfied with their jobs in the developed
countries surveyed.
However, there has been a decline in job satisfaction since the
early 1990s. In the US nearly an eight percent drop in the 90s.
Surprisingly those last years were ones of growth and economic
expansion.
What factors might explain the decline despite growth:
Increased productivity through heavier employee workloads and
tighter deadlines
Employees feeling they have less control over their work
While some segments of the market are more satisfied than
others, they tend to be higher paid, higher skilled jobs which
gives workers more control and challenges.
The impact of satisfied and Dissatisfied Employees on the
workplace
There are a number of ways employees can express
dissatisfaction
Exit
Voice
Loyalty
Neglect
Exit: Behaviour directed toward leaving the organization,
including looking for a new position as well as resigning.
Voice: Actively and constructively attempting to improve
conditions, including suggesting improvements, discussing problems
with superiors, and some forms of union activity.
Loyalty: Passively but optimistically waiting for conditions to
improve, including speaking up for the organization in the face of
external criticism, and trusting the organization and its
management to do the right thing.
Neglect: Passively allowing conditions to worsen, including
chronic absenteeism or lateness, reduced effort, and increased
error rate.
Exit and neglect behaviours encompass our performance
variablesproductivity, absenteeism, and turnover.
Voice and loyalty are constructive behaviours allow individuals
to tolerate unpleasant situations or to revive satisfactory working
conditions. It helps us to understand situations, such as those
sometimes found among unionized workers, where low job satisfaction
is coupled with low turnover.
Managers interest in job satisfaction tends to center on its
effect on employee performance. Much research has been done on the
impact of job satisfaction on employee productivity, absenteeism,
and turnover. Job Satisfaction and OCB
It seems logical to assume that job satisfaction should be a
major determinant of an employees organizational citizenship
behaviour. More recent evidence, however, suggests that
satisfaction influences OCB, but through perceptions of
fairness.
There is a modest overall relationship between job satisfaction
and OCB.
Basically, job satisfaction comes down to conceptions of fair
outcomes, treatment, and procedures. When you trust your employer,
you are more likely to engage in behaviours that go beyond your
formal job requirements.
Job Satisfaction and Customer Satisfaction
Evidence indicates that satisfied employees increase customer
satisfaction and loyalty.
Customer retention and defection are highly dependent on how
front-line employees deal with customers. Satisfied employees are
more likely to be friendly, upbeat, and responsive. Customers
appreciate that.
Dissatisfied customers can also increase an employees
dissatisfaction. The more employees work with rude and thoughtless
customers, the more likely they are to be dissatisfied.
Job Satisfaction and productivity Happy workers are not
necessarily productive workersthe evidence suggests that
productivity is likely to lead to satisfaction.
At the organization level, there is renewed support for the
original satisfaction-performance relationship. It seems
organizations with more satisfied workers as a whole are more
productive organizations.
Job Satisfaction and absenteeism
We find a consistent negative relationship between satisfaction
and absenteeism. The more satisfied you are, the less likely you
are to miss work.
It makes sense that dissatisfied employees are more likely to
miss work, but other factors have an impact on the relationship and
reduce the correlation coefficient. For example, you might be a
satisfied worker, yet still take a mental health day to head for
the beach now and again.
Job Satisfaction and turnover
Satisfaction is also negatively related to turnover, but the
correlation is stronger than what we found for absenteeism.
Other factors such as labour market conditions, expectations
about alternative job opportunities, and length of tenure with the
organization are important constraints on the actual decision to
leave ones current job.
Evidence indicates that an important moderator of the
satisfaction-turnover relationship is the employees level of
performance. Job Satisfaction and Workplace Deviance Job
dissatisfaction predicts a lot of specific behaviours, including
unionization attempts, substance abuse, stealing at work, undue
socializing, and tardiness. Researchers argue that these behaviours
are indicators of a broader syndrome that we would term deviant
behaviour in the workplace.PERCEPTION AND INDIVIDUAL DECISION
MAKING
Perception is a process by which individuals organize and
interpret their sensory impressions in order to give meaning to
their environment.
Why is this important to the study of OB?
Because peoples behaviour is based on their perception of what
reality is, not on reality itself Factors Influencing
Perception
Factors that shape (and can distort perception):
Perceiver
Target
Situation
When an individual looks at a target and attempts to interpret
what he or she sees, that interpretation is heavily influenced by
personal characteristics of the individual perceiver.
The more relevant personal characteristics affecting perception
of the perceiver are attitudes, motives, interests, past
experiences, and expectations.
Characteristics of the target can also affect what is being
perceived. This would include attractiveness, gregariousness, and
our tendency to group similar things together. For example, members
of a group with clearly distinguishable features or color are often
perceived as alike in other, unrelated characteristics as well.
The context in which we see objects or events also influences
our attention. This could include time, heat, light, or other
situational factors.
Person Perception: Making Judgments about Others
Attribution Theory Our perceptions of people differ from our
perceptions of inanimate objects.
We make inferences about the actions of people that we do not
make about inanimate objects.
Nonliving objects are subject to the laws of nature.
People have beliefs, motives, or intentions.
Our perception and judgment of a persons actions are influenced
by these assumptions.
Attribution theory suggests that when we observe an individuals
behaviour, we attempt to determine whether it was internally or
externally caused. That determination depends largely on three
factors:
Distinctiveness
Consensus
Consistency
Clarification of the differences between internal and external
causation:
Internally caused behaviours are those that are believed to be
under the personal control of the individual.
Externally caused behaviour is seen as resulting from outside
causes; that is, the person is seen as having been forced into the
behaviour by the situation.
Distinctiveness refers to whether an individual displays
different behaviours in different situations. What we want to know
is whether the observed behaviour is unusual.
If it is, the observer is likely to give the behaviour an
external attribution.
If this action is not unusual, it will probably be judged as
internal.
Consensus occurs if everyone who is faced with a similar
situation responds in the same way. If consensus is high, you would
be expected to give an external attribution to the employees
tardiness, whereas if other employees who took the same route made
it to work on time, your conclusion as to causation would be
internal.
Consistency in a persons actions. Does the person respond the
same way over time? The more consistent the behaviour, the more the
observer is inclined to attribute it to internal causes.
Fundamental Attribution Error
There is substantial evidence that we have a tendency to
underestimate the influence of external factors and overestimate
the influence of internal or personal factors.
There is also a tendency for individuals to attribute their own
successes to internal factors such as ability or effort while
putting the blame for failure on external factors such as luck.
This is called the self-serving bias and suggests that feedback
provided to employees will be distorted by recipients.
Frequently Used Shortcuts in Judging Others We use a number of
shortcuts when we judge others. An understanding of these shortcuts
can be helpful toward recognizing when they can result in
significant distortions.
Selective Perception
Any characteristic that makes a person, object, or event stand
out will increase the probability that it will be perceived.
It is impossible for us to assimilate everything we seeonly
certain stimuli can be taken in. Selectivity works as a shortcut in
judging other people by allowing us to speed-read others, but not
without the risk of drawing an inaccurate picture.
Halo Effect
The halo effect occurs when we draw a general impression on the
basis of a single characteristic:
This phenomenon frequently occurs when students appraise their
classroom instructor.
Students may give prominence to a single trait such as
enthusiasm and allow their entire evaluation to be tainted by how
they judge the instructor on that one trait.
The reality of the halo effect was confirmed in a classic
study.
Subjects were given a list of traits such as intelligent,
skillful, practical, industrious, determined, and warm, and were
asked to evaluate the person to whom those traits applied. When the
word warm was substituted with cold the subjects changed their
evaluation of the person.
Contrast Effects
We do not evaluate a person in isolation. Our reaction to one
person is influenced by other persons we have recently
encountered.
For example, an interview situation in which one sees a pool of
job applicants can distort perception. Distortions in any given
candidates evaluation can occur as a result of his or her place in
the interview schedule.
Projection
This tendency to attribute ones own characteristics to other
peoplewhich is called projectioncan distort perceptions made about
others.
When managers engage in projection, they compromise their
ability to respond to individual differences. They tend to see
people as more homogeneous than they really are.
Stereotyping
Stereotypingjudging someone on the basis of our perception of
the group to which he or she belongs
Generalization is not without advantages. It is a means of
simplifying a complex world, and it permits us to maintain
consistency. The problem, of course, is when we inaccurately
stereotype.
In organizations, we frequently hear comments that represent
stereotypes based on gender, age, race, ethnicity, and even
weight.
Specific Applications of shortcuts in Organizations
We evaluate how much effort our co-workers are putting into
their jobs.
Employment Interview
Evidence indicates that interviewers make perceptual judgments
that are often inaccurate.
Agreement among interviewers is often poor. Different
interviewers see different things in the same candidate and thus
arrive at different conclusions about the applicant.
Interviewers generally draw early impressions that become very
quickly entrenched. Studies indicate that most interviewers
decisions change very little after the first four or five minutes
of the interview.
Because interviews usually have so little consistent structure
and interviewers vary in terms of what they are looking for in a
candidate, judgments of the same candidate can vary widely.
Performance Expectations
Evidence demonstrates that people will attempt to validate their
perceptions of reality, even when those perceptions are faulty.
Self-fulfilling prophecy or Pygmalion effect characterizes the
fact that peoples expectations determine their behaviour.
Expectations become reality.
Performance Evaluation
An employees performance appraisal is very much dependent on the
perceptual process.
Although the appraisal can be objective, many jobs are evaluated
in subjective terms. Subjective measures are, by definition,
judgmental.
To the degree that managers use subjective measures in
appraising employees, what the evaluator perceives to be good or
bad employee characteristics or behaviours will significantly
influence the outcome of the appraisal.
The Link between Perception and Individual Decision Making
Individuals in organizations make decisions; they make choices
from among two or more alternatives.
Top managers determine their organizations goals, what products
or services to offer, how best to finance operations, or where to
locate a new manufacturing plant.
Middle- and lower-level managers determine production schedules,
select new employees, and decide how pay raises are to be
allocated.
Non-managerial employees also make decisions including whether
or not to come to work on any given day, how much effort to put
forward once at work, and whether or not to comply with a request
made by the boss.
A number of organizations in recent years have been empowering
their non-managerial employees with job-related decision-making
authority that historically was reserved for managers.
Decision-making occurs as a reaction to a problem.
There is a discrepancy between some current state of affairs and
some desired state, requiring consideration of alternative courses
of action.
The awareness that a problem exists and that a decision needs to
be made is a perceptual issue.
Every decision requires interpretation and evaluation of
information. The perceptions of the decision maker will address
these two issues.
Data are typically received from multiple sources.
Which data are relevant to the decision and which are not?
Alternatives will be developed, and the strengths and weaknesses
of each will need to be evaluated.
Decision Making in Organizations The Rational Decision-Making
Process The optimizing decision maker is rational. He or she makes
consistent, value-maximizing choices within specified
constraints.
These decisions follow a six-step rational decision-making
model.Step 1: Define the problem
Step 2: Identify the decision criteria Step 3: Allocate weights
to the criteria.Step 4: Develop the alternativesStep 5: Evaluate
the alternativesStep 6: Select the best alternative. How Are
Decisions Actually Made in Organizations?
Are decision makers in organizations rational?
When decision makers are faced with a simple problem having few
alternative courses of action, and when the cost of searching out
and evaluating alternatives is low, the rational model is fairly
accurate.
Most decisions in the real world do not follow the rational
model.
Decision makers generally make limited use of their
creativity.
Choices tend to be confined to the neighbourhood of the problem
symptom and to the neighbourhood of the current alternative.
Bounded Rationality
When faced with a complex problem, most people respond by
reducing the problem to a level at which it can be readily
understood.
This is because the limited information-processing capability of
human beings makes it impossible to assimilate and understand all
the information necessary to optimize.
People satisfiesthey seek solutions that are satisfactory and
sufficient.
Individuals operate within the confines of bounded rationality.
They construct simplified models that extract the essential
features.
How does bounded rationality work?
Once a problem is identified, the search for criteria and
alternatives begins.
The decision maker will identify a limited list made up of the
more conspicuous choices, which are easy to find, tend to be highly
visible, and they will represent familiar criteria and previously
tried-and-true solutions.
Once this limited set of alternatives is identified, the
decision maker will begin reviewing it.
The decision maker will begin with alternatives that differ only
in a relatively small degree from the choice currently in effect.
The first alternative that meets the good enough criterion ends the
search.
The order in which alternatives are considered is critical in
determining which alternative is selected.
Assuming that a problem has more than one potential solution,
the satisfying choice will be the first acceptable one the decision
maker encounters.
Intuition
Intuitive decision-making has recently come out of the closet
and into some respectability.
What is intuitive decision making?
It is an unconscious process created out of distilled
experience. It operates in complement with rational analysis.
Some consider it a form of extrasensory power or sixth
sense.
Some believe it is a personality trait that a limited number of
people are born with.
Research on chess playing provides an excellent example of how
intuition works.
The experts experience allows him or her to recognize the
pattern in a situation and draw upon previously learned information
associated with that pattern to quickly arrive at a decision
choice.
The result is that the intuitive decision maker can decide
rapidly with what appears to be very limited information.
Although intuitive decision making has gained in respectability,
dont expect peopleespecially in North America, Great Britain, and
other cultures where rational analysis is the approved way of
making decisionsto acknowledge they are using it. Rational analysis
is considered more socially desirable in these cultures.
Problem Identification
Problems that are visible tend to have a higher probability of
being selected than ones that are important. Why?
Visible problems are more likely to catch a decision makers
attention.
Second, remember we are concerned with decision making in
organizations. If a decision maker faces a conflict between
selecting a problem that is important to the organization and one
that is important to the decision maker, self-interest tends to win
out.
The decision makers self interest also plays a part. When faced
with selecting a problem important to the decision maker or
important to the organization, self interest tends to win out.
Alternative Development
Since decision makers seek a satisfying solution, there is a
minimal use of creativity in the search for alternatives. Efforts
tend to be confined to the neighbourhood of the current
alternative.
Evidence indicates that decision-making is incremental rather
than comprehensive. Decision makers make successive limited
comparisons. The picture that emerges is one of a decision maker
who takes small steps toward his or her objective.
Making Choices In order to avoid information overload, decision
makers rely on heuristics or judgmental shortcuts in decision
making.
There are two common categories of heuristicsavailability and
representativeness. Each creates biases in judgment.
Another bias is the tendency to escalate commitment to a failing
course of action.
Availability heuristic
The availability heuristic is the tendency for people to base
their judgments on information that is readily available to
them.
Events that evoke emotions, that are particularly vivid, or that
have occurred more recently tend to be more available in our
memory. Fore example, many more people suffer from fear of flying
than fear of driving in a car.
Representative heuristic
To assess the likelihood of an occurrence by trying to match it
with a preexisting category, managers frequently predict the
performance of a new product by relating it to a previous products
success.
Escalation of commitment
Escalation of commitment is an increased commitment to a
previous decision in spite of negative information.
It has been well documented that individuals escalate commitment
to a failing course of action when they view themselves as
responsible for the failure.
Implications for the organizations:
An organization can suffer large losses when a manager continues
to invest in a failed plan just to prove his or her original
decision was correct.
Consistency is a characteristic often associated with effective
leaders. Managers might be reluctant to change a failed course of
action to appear consistent.
Common Biases and Errors in Decision making Decision makers
engage in bounded rationality, but an accumulating body of research
tells us that decision makers also allow systematic biases and
errors to creep into their judgements.
Overconfidence Bias Those individuals whose intellectual and
interpersonal abilities, are weakest are likely to overestimate
their performance and ability.
Anchoring Bias
A tendency to fixate on initial information, from which one then
fails to adequately adjust for subsequent information.
Confirmation Bias
The tendency to seek out information that reaffirms past choices
and to discount information that contradicts past judgements.
Availability Bias
The tendency for people to base their judgements on information
that is readily available to them.
Escalation of Commitment
An increased commitment to a previous decision in spite of
negative information.
Randomness Error
The tendency of individuals to believe that they can predict the
outcome of random events.
Winners curse
A decision-making dictum which argues that the winning
participants in an auction typically pay too much for the winning
item.
Hindsight Bias
The tendency to believe falsely, after an outcome of an event is
actually known, that one would have accurately predicted that
outcome.
Individual Differences: Decision-Making Styles
Individual differences create deviations from the rational
model. Here, we look at two differences: Personality and
gender.
Personality There hasnt been much research on personality and
decision making.
Research has considered conscientiousness and self-esteem.
Some research has shown that specific facets of
conscientiousness-rather than the broad trait itself affect
escalation of commitment.
Two facets of conscientiousness-Achievement striving and
Dutifulness.
Achievement striving people were more likely to escalate their
commitment, whereas dutiful people were less likely.
Dutiful people are more inclined to do what they see as best for
the organization.
Achievement-striving individuals appear to be more susceptible
to the hindsight bias.
People with high self-esteem appear to be especially susceptible
to the self-serving bias. That is, they blame others for their
failures while taking credit for successes.
Gender Recent research on rumination offers insights into gender
differences in decision making.
Rumination refers to reflecting at length.
In terms of decision making, it means over thinking
problems.
Women are more likely than men to engage in rumination.
Twenty years of study find that women spend much more time than
men analyzing the past, present, and future.
Theyre more likely to overanalyze problems before making a
decision and to rehash a decision once it has been made. A theory
is that women are more empathetic and more affected be events in
others lives, so they have more to ruminate about.
Organizational Constraints
The organization itself constrains decision makers. This happens
due to policies, regulations, time constraints, etc.
Performance evaluation
Managers are strongly influenced in their decision making by the
criteria by which they are evaluated. Their performance in decision
making will reflect expectation.
Reward systems
The organizations reward system influences decision makers by
suggesting to them what choices are preferable in terms of personal
payoff.
Programmed routines
All but the smallest of organizations create rules, policies,
procedures, and other formalized regulations in order to
standardize the behavior of their members.
By programming decisions, organizations are able to get
individuals to achieve high levels of performance without paying
for the years of experience.
System-imposed time constraints
Organizations impose deadlines on decisions.
Decisions must be made quickly in order to stay ahead of the
competition and keep customers satisfied.
Almost all important decisions come with explicit deadlines.
Historical Precedents
Decisions have a context. Individual decisions are more
accurately characterized as points in a stream of decisions.
Decisions made in the past are ghosts which continually haunt
current choices. It is common knowledge that the largest
determining factor of the size of any given years budget is last
years budget.
What about Ethics in Decision Making?
Ethical considerations should be an important criterion in
organizational decision making.
Three Ethical Decision Criteria
Utilitariandecisions are made solely on the basis of their
outcomes or consequences. The goal of utilitarianism is to provide
the greatest good for the greatest number. This view tends to
dominate business decision making.
Rightscalls on individuals to make decisions consistent with
fundamental liberties and privileges as set forth in documents such
as the Bill of Rights.
An emphasis on rights means respecting and protecting the basic
rights of individuals, such as the right to privacy, to free
speech, and to due process.
Justicerequires individuals to impose and enforce rules fairly
and impartially. There is an equitable distribution of benefits and
costs.
Advantages and liabilities of these three criteria:
Utilitarianism
Promotes efficiency and productivity
It can result in ignoring the rights of some individuals,
particularly those with minority representation in the
organization.
Rights
Protects individuals from injury and is consistent with freedom
and privacy
It can create an overly legalistic work environment that hinders
productivity and efficiency.
Justice
Protects the interests of the underrepresented and less
powerful
It can encourage a sense of entitlement that reduces risk
taking, innovation, and productivity.
Decision makers tend to feel safe and comfortable when they use
utilitarianism. Many critics of business decision makers argue that
this perspective needs to change.
Increased concern in society about individual rights and social
justice suggests the need for managers to develop ethical standards
based solely on non-utilitarian criteria.
Improving Creativity in Decision Making
Creativity is the ability to produce novel and useful ideas.
These are ideas that are different from what has been done before,
but that are also appropriate to the problem or opportunity
presented.
Creative Potential
Most people have creative potential.
People have to get out of the psychological ruts most of us get
into and learn how to think about a problem in divergent ways.
People differ in their inherent creativity.
A study of lifetime creativity of 461 men and women found that
fewer than one percent were exceptionally creative.
Ten percent were highly creative, and about sixty percent were
somewhat creative.
Three-component model of creativityThis model proposes that
individual creativity essentially requires expertise,
creative-thinking skills, and intrinsic task motivation. Expertise.
is the foundation for all creative work. The potential for
creativity is enhanced when individuals have abilities, knowledge,
proficiencies, and similar expertise in their field of
endeavour.
Creative thinking skills. This encompasses personality
characteristics associated with creativity, the ability to use
analogies, as well as the talent to see the familiar in a different
light.
Intrinsic task motivation. The desire to work on something
because its interesting, involving, exciting, satisfying, or
personally challenging. This turns creativity potential into actual
creative ideas. It determines the extent to which individuals fully
engage their expertise and creative skills.
ORGANIZATIONAL BEHAVIOUR NOTESPage 48